Proposed changes to certain tax reliefs revealed in the Finance Bill will create additional challenges for young farmers, according to Bill Gleeson.
Running a dairy and beef enterprise just outside Nenagh in Co. Tipperary with his father, Bill is currently in the process of setting up a farm partnership.
Milking 90 cows on mostly rented land, the young farmer is also a member of Macra na Feirme’s Agricultural Affairs Committee.
As part of Budget 2019, both the young trained farmer stamp duty relief and the stock relief for young trained farmers were extended for a further three years – up until the end of 2021.
The bill stated that the cap would apply to the amount of tax relief/credit that can be enjoyed by a farmer under the: young trained farmer stamp duty relief; the stock relief for young trained farmers; and the succession farm partnerships tax credit.
The initial announcement was welcomed by young farmers, according to Bill, but the mood changed when the measures in the Finance Bill were announced.
“From what I saw of the initial budget, we thought this is just what we wanted. It seemed to be fine for us and it would keep our plans running along smoothly.
This latest release from the Finance Bill, of the cap of €70,000, is going to alter our plans greatly.
Ideally, Bill would like to buy land close to the home farm in the future – rather than renting land – in order to make the farm more efficient.
Impact
The measures included in the Finance Bill will have a significant impact on Bill’s plans of setting up a farm partnership.
He stated that his value in the partnership has been lessened due to the fact that the stock relief that he thought he would have access to over the next few years has will be reduced under these measures.
A lot of other young farmers will find themselves in the same boat, he added.
“It has to affect young farmers, in my parish alone you will count on one hand how many young farmers there are.
It is very difficult to attract young people into farming and now all of a sudden the Government is further pulling out the few things that can incentivise young people to come into farming.
“We got absolutely no warning of what was coming. Normally there would have been some bit of information let out earlier in the year saying that we will have to do this and we would have had time to assess it.
“But this year it was just slipped into the middle of the Finance Bill,” he said.
Brexit
Bill questioned the Government’s decision to introduce the measures this year, given the uncertainty arising from Brexit.
“The Government has said that it has to do it to bring it in line with EU regulations and yet they won’t bring the definition of a young farmer in line with EU regulations.
“We’re still classed at 35 here in Ireland, whereas the EU regulation says 40. So I question why they have to suddenly bring it in line with one part of the EU regulations and they won’t bring it in line with other parts of it,” he said.